Iowa governor, feds reach deal on health expansion

Published: Friday, Dec. 13, 2013 10:22 a.m. CST

DES MOINES (AP) — Iowa Gov. Terry Branstad announced Thursday that he had reached an agreement with federal authorities to expand low income health care in the state, which includes a compromise on charging premiums of the very poor.

Iowa had sought a waiver enabling the state to receive more federal Medicaid money for the proposed Iowa Health and Wellness Plan. Earlier this week, officials from the Centers for Medicare and Medicaid Service said the waiver request was granted, but denied Branstad the ability to charge premiums on people with incomes below 100 percent of the federal poverty line.

Under the compromise, the state will be able to charge those with lower incomes, but cannot deny the poorest participants benefits for not paying.

“This is an Iowa plan that fits the health needs of our state,” Branstad said in a news release. “The Iowa Health and Wellness Plan will improve health outcomes for Iowans.”

The White House released a statement that called the agreement great news for Iowa residents who will get access to better health care.

“It is another example of how, when both parties are flexible and work together, we can move the country forward for the good of all Americans,” the statement said.

Iowa lawmakers in May approved legislation that accepts federal dollars offered to states that expand Medicaid under President Barack Obama’s health care overhaul. The plan, submitted to federal authorities in August, would cover an estimated 150,000 low-income Iowans, but not on the current Medicaid plan.

Those with incomes up to 100 percent of the poverty line — less than about $24,000 annually for a family of four — would go on a new state-run health plan with benefits similar to those offered to state workers. People with incomes from 101 to 138 percent of the poverty line — between about $24,000 and $32,000 annually for a family of four — would get private health plans on the new health care exchanges; those premiums would be paid for with the federal dollars.

The state will start charging small monthly premiums to those with incomes over half of the federal poverty line in 2015. The premiums would be waived if people meet certain health goals, or in cases of hardship, and the out-of-pocket costs could not exceed 5 percent of their annual income.

Branstad has insisted the premiums are a key part of the plan because he says they will promote healthier behaviors. As part of the compromise, the state can still charge the premiums to those between 50 and 100 percent of poverty, but those people cannot lose coverage if they don’t pay, said Branstad policy adviser Michael Bousselot. He noted that the state can seek to collect any debts.

More than 50,000 Iowa residents are already signed up for the Iowa Health and Wellness plan, all of whom are currently on a different low-income health program set to expire at the end of the year. Thousands more have applied for state coverage and may be eligible.

The agreement will be finalized by the end of the month, with coverage set to start Jan. 1.